Securities Industry Essentials Exam (SIE) exam pdf guide & SIE prep sure exam
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FINRA SIE Exam Syllabus Topics:
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SIE Sample Questions Pdf | Latest SIE Exam Book
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FINRA Securities Industry Essentials Exam (SIE) Sample Questions (Q116-Q121):
NEW QUESTION # 116
An investor owns $10,000 par value of a municipal bond with the following rates:
* 4.0% coupon rate
* 5.0% current yield
* 4.5% yield to maturity (YTM)
* 6.5% tax-equivalent yield
What amount of interest should the investor expect to receive each year?
Answer: C
Explanation:
The annual interest on a bond is calculated based on thecoupon rateand the bond's par value.
* Coupon rate = 4.0%.
* Annual interest = $10,000 (par value) × 4.0% =$400.
* A is correctbecause the coupon rate determines the annual interest.
* B,C, andDare incorrect because they reflect incorrect calculations. The current yield, YTM, and tax- equivalent yield do not affect the bond's fixed coupon payments.
NEW QUESTION # 117
SEC Regulation S-P (Consumer Privacy) requires certain information to be included in privacy notices delivered to customers of broker-dealers (BDs). Which of the following information is required to be included in the privacy notice?
Answer: C
Explanation:
Regulation S-P mandates that broker-dealers disclose how they collect, protect, and share customers' nonpublic personal information. The privacy notice must include:
* The categories of information collected.
* The firm's policies for safeguarding data.
* Opt-out rights for sharing information with unaffiliated third parties.
* D is correctbecause privacy notices must describe policies for protecting customer information.
* A,B, andCare incorrect because they do not relate to the required elements of Regulation S-P privacy notices.
NEW QUESTION # 118
Which of the following events requires reporting on a Form U4?
Answer: A
Explanation:
Form U4 (Uniform Application for Securities Industry Registration or Transfer) requires disclosure of any felony convictions, regardless of whether they are securities-related. A felony conviction for drunk driving falls under this requirement.
* B is correctbecause a felony conviction must be reported on Form U4.
* Ais incorrect as misdemeanor speeding tickets do not require disclosure unless they involve fraud, theft, or dishonesty.
* Cis incorrect as bench warrants are not reportable unless they lead to a conviction.
* Dis incorrect because gross misdemeanors (except those involving fraud or dishonesty) do not require reporting.
NEW QUESTION # 119
Which of the following is the primary risk of using asset allocation models without periodic rebalancing?
Answer: B
Explanation:
Step by Step Explanation:
* Rebalancing: Ensures that a portfolio remains aligned with its target allocation. Without rebalancing, outperforming assets can become overweighted, increasing exposure to specific risks.
* Incorrect Options:
* Inflation: Impacts purchasing power but isn't tied to rebalancing.
* Marketability: Refers to liquidity and isn't linked to allocation models.
* Interest Rate Risk: Relates to fixed-income investments and isn't directly addressed by allocation models.
References:
* SEC Investor Bulletin on Asset Allocation: SEC Asset Allocation.
NEW QUESTION # 120
Which of the following transactions is most profitable if executed prior to a significant rise in a company's stock price?
Answer: C
Explanation:
Buying a call option gives the investor the right to purchase the stock at a fixed price (strike price). If the stock's price rises significantly, the value of the call option increases, allowing the investor to profit.
* B is correctbecause a call option profits directly from a stock price increase.
* Ais incorrect because a put option profits from a stock price decline.
* CandDare incorrect because selling options limits profit potential and exposes the seller to significant risk if the stock moves unfavorably.
NEW QUESTION # 121
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